Jewish Thoughts on Wealth: Gain Knowledge

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

In my Sunday posts we're currently digging into the book The Jewish Phenomenon: Seven Keys to the Enduring Wealth of a People. It notes that Jews are disproportionately wealthy and accomplished and much of this success is due to seven keys which can be traced to the teachings of the Jewish faith.

Today we're going to talk about one of the "seven keys to Jewish success" that the authors list: understanding that real wealth is portable; it's knowledge. (BTW, this "key" goes nicely with "key" #3: successful people are professionals and entrepreneurs.)

This whole chapter is an ode to higher education. The authors detail much of the information that we go over regularly here at Free Money Finance, in particular how much more those with a bachelor's degree earn over a lifetime versus those with no college education (and the more education, the better -- in general.) They also give statistics on Jewish higher education (from a 1990 study, so it is a bit dated):

87 percent of college-age Jews were enrolled in college versus 40 percent for non-Jews.

So, more education (in general) leads to a higher income and Jews have more education than average. Hence, Jews have more income than average.

Now of course we know that a higher income doesn't necessarily lead to greater wealth (they could spend all of their higher income), but it certainly helps. Plus, we'll see in a later post that Jews also have a good handle on controlling their spending. And we all know that a high income with an ability to control spending are keys to becoming wealthy.

The book goes on to list six ways we all can use what the Jews do in this "key" to the economic advantage of our kids. They suggest:

1. Build your child's self-esteem.
2. Build the ability to defer gratification.
3. Choose the best education possible.
4. Develop and demonstrate informed and literate habits.
5. Create the education expectation.
6. Keep your skills up to date (as an adult).

I would agree with most of these. The one I might take issue with is #3. I think you want to get the education that costs you the least and still gets you the job/pay you want. I've seen too many studies that say the "best" schools don't really end up getting you much for the extra cost. And I've also seen way too many people with enormous amounts of debt because they "had to" go to "the best" school. There's no such thing as "the best" school IMO.

Any thoughts to add?

Comments

[Geoff]

In regard to #3, I would think it may refer to all school, especially k-12, where choosing the best or better than others can make a significant difference.

[Money Reasons]

The Jewish culture is quite a force!

Some of the points above has to take years to cultivate and grow for a Jewish child! I personally like the way they focus on the activies that help the child to be successful later in life.

I wonder how Jewish mother learn how to raise their kids this way, or perhaps their social interaction with other Jewish families guides them?

[Rob Bennett]

I agree with what is being said here.

I would just add that this is not the only route to a satisfying life.

There aren't many great Jewish centerfielders. That's because they are spending their time in book-learning, which generally does indeed pay off better. But if your kid is a natural athlete, that's an alternative route to wealth that might be the right one for that particular child.

I mentioned last Sunday that I grew up in a Catholic neighborhood. A lot of the Irish in that neighborhood became policeman. We don't think of them as wealthy, but the reality is that they do well. They have good benefits, the work is steady, they retire early, and so on.

There's more than one path and not all of us can pursue what is being described as "the Jewish path." However, I do personally believe that what is being described as "the Jewish path" offers the best odds of success in our society.

Rob

[StLPastor]

Rob,
counting on athletics is a poor path to wealth. Not to suggest that you shouldn't participate in athletics-there are some significant charter building/teamwork benefits to participating in organized sports, and the networks you form there can be useful for your whole life. But you have to be one of the top fraction of 1% in terms of athletics and still be very lucky to successfully build wealth as an athlete, whereas a good college degree is useful for anyone. As the NCAA commercial suggests "most of us are going pro in something other than sports." Becoming a police officer is a good way to build wealth, but usually it requires a bachelors as well.

I think part of what this study suggests is that a LOT higher percentage of people are capable of getting a college education than actually go through with it, and that being motivated to be the best and being trained to work hard really does have an impact on success rates.

[Dave Farquhar]

Here's a suggestion on education: Get the best early education you can. Or give that to your kids, since your own early education isn't really your choice. My parents did me a huge favor and enrolled me in Montessori preschool and kindergarten. By the time I graduated kindergarten, I was reading on the third grade level. In first grade, I was the most advanced in my class in just about every subject, though reading and spelling were my best. It gave me a tremendous head start. I eventually regressed back to average in math, but was an honors student at every level.

So my oldest son is enrolled in a Montessori program close to home. It's expensive, but I get comments all the time about how smart he is for his age.

I attended above-average schools from grade school through college. A good high school, but not the biggest name by a long shot. And then I went to a state school for college. I haven't made gobs of money, partly because of my choice of employers early in my career, but I've been successful. Getting the very best for those formative years, then second-best the rest of the way out worked well for me, and it didn't break the bank.

[MasterPo]

Regarding #3, no one ever says they wish they attened a lesser school.

[Rob Bennett]

"counting on athletics is a poor path to wealth. "

I agree 100 percent with this as a general proposition, StLPastor.

I don't think you can rule it out in all circumstances, though. Some are just not made for book-learning and yet can rise to the top through athletic pursuits. What should those kids do? I think they should engage in enough book-learning to make it in this world. But I think they also should feel pride in the thing they are good at and make the most of it. Doing well in athletics can give a kid a sense of confidence that can lead to success in all sorts of life pursuits.

It's not only those who make the big leagues who see any benefit from athletics. Sarah Palin is rich today, right? She has many times emphasized what she learning during her high-school basketball playing as being the key to her success. Some who play sports make contacts doing so that serve them well in all sorts of businesses later in life. There's more than one way to skin a cat.

I agree that book-learning is the high-percentage bet. My point is that some of us are made to easily take advantage of that bet and others of us are not and the parent trying to advise his or her child needs to take that factor into consideration too. There are some kids who could achieve great things with their natural talents but who are wasting their energies trying to go with a high percentage bet that just doesn't happen to be a high percentage bet for people with their particular skill set.

Those are my thoughts re the question, in any event.

Rob

[StLPastor]

Rob,
I see what you mean, I guess I just know to many parents with an anti-intellectualism bias who starting from a young age on seem more concerned with athletic success than academic work. I really think kids should have a wide range of interests and try different things until at least halfway through high school before really trying to focus their careers/education. But in some ways, it sounds like our disagreement is a statistical question-are there more people who should be working at academics who aren't, or more people who have been constrained by the 'high percentage' path.

[Michele]

I agree with those who made the point about opting for the best early-childhood/K-12 education you can afford for your children. Having spent many years working with high school students, I've seen time and time again the difference that this makes, not only in terms of their knowledge base, but also their maturity level and ability to engage in thoughtful, informed discussion.

Also, in regards to your point about #3 and whether or not it is important for students to attend the very best college they can get into: I actually think this is a very important, specifically in the context of this article, not necessarily because of the quality of the education they'll get and caliber of professors they'll get it from (though that's certainly a factor), but because of the opportunities they'll have to network with important people, who will no doubt play a role in their success. As we already know, this is another very important element in this so-called Jewish phenomenon.

While students who attend large, relatively affordable universities and community colleges can certainly achieve the degree they need to obtain the job they want, their opportunities to make strong personal and professional connections with the movers and shakers in their field will be limited. This is because the best, brightest, most published and most well-known scholars in any given subject are almost always at relatively small, usually private, and often expensive schools.

There are exceptions of course - there are some world renowned professors at the University of Michigan and UC-Berkeley for example - both public and relatively large. However, they're both very competitive and expensive in comparison to other state schools.

[Rob Bennett]

are there more people who should be working at academics who aren't, or more people who have been constrained by the 'high percentage' path.

I agree with you that parents should be doing more to encourage their kids to master the academic disciplines, StLPastor, and should be focusing less on sports. My two boys play baseball but I let them know that I just view it as a fun thing and have no concern about how well they do. But they are required to do their best on their school work. I really was just raising a nit, not a disagreement with the points made in the blog entry.

Rob

[Jim]

I think going to the best school you can is worthwhile to a point. I will pay for my daughter to go to a top 25 school.... after that I don't understand why you not attend a state school over the small, expensive schools that are no better ranked. I also think it is not the professors that are any better at the elite schools - because they primarily care about their research and publishing, not teaching. Professors are lesser schools might not be top in their disciplines, but can be better teachers because they were hired as teachers not researchers. Also, in most subjects, for example calculus, the material is the same at elite as in state schools. I think the biggest benefit from attending an elite school is the learning and challenges you get from being around your generally highly intelligent and motivated fellow students. Also, going to a top school can help in starting a career because I know of companies that only recruit at certain top schools. And even when applying for your subsequent jobs - it helps that you went to the same school or caliber of school as the hiring managers. It might no be right but I think people want to hire smart, motivated people like themselves - and going to the same, right school helps.

[MBTN]

Rob:

Even if you "make it" through athletics, are you really making it? Consider the long list of athletes who made millions only to lose it all because of poor business and financial decisions. For every Michael Jordan whose success on the court translated to success off the court, there are hundreds of examples of athletes who flushed their success down the toilet. Sports Illustrated published an article last year about how so many sports stars end up destitute, bankrupt, etc, because they didn't know how to handle the financial side of their lives. The statistics that they provided in SI are eye opening. I would argue that the only way to make it in athletics is to use your skill to get yourself a free college education so you don't end up destitute like so many former pros.

I do understand your point in that there is more than one way to success. However, athletics is a poor example to choose.

[MBTN]

Also the statement, "There aren't many great Jewish centerfielders. That's because they are spending their time in book-learning, which generally does indeed pay off better" contains a great deal of stereotyping. You really need to be careful about generalizations like this. While this entire topic of Jewish thoughts on wealth is interesting, there is a danger that it crosses the line into stereotyping.

First of all, let's be clear that Judaism is a religion. There isn't a Jewish gene or race or ethnicity. Many Jews are sensitive to this because this because of the experience of WWII. There are people of various races and ethnicities who call themselves Jews: caucasian, latino, African, Asian, etc. What these people have in common is that they follow the same religion. Nobody would say that Catholics are a single race because there are Irish Catholics, Italian Catholics, African Catholics, Latin American Catholics, etc. Same with Jews. Therefore by definition there cannot be anything genetic which says that Jews aren't athletic.

Second, there are plenty of examples of great Jewish athletes. I'd like somebody to tell Amare Soudamaire that he isn't athletic! Maybe Rod Carew wasn't really a Hall of Famer. Shawn Greene didn't play Center Field but he won Gold Gloves as a right fielder. Sandy Koufax was a pretty decent pitcher by all accounts. Pretty much every great basketball player during the first half of the 20th century was Jewish. Jews represent a small percentage of the overall US population so their contribution to sports is in proportion to their overall population.

Now you might say that I picked out some outlying examples, so here is another. Israel, which is made up of Jews primarily, requires that all of its citizens serve in the army. Despite the "limitation" of being made up of Jewish "bookworms", the Israeli army is generally considered to be one of the best in the world, person for person. Google Six Day War or Entebbe Raid for more knowledge on the exploits of these non-athletes. Compare the results of the Jewish book-learners in their hostage rescue at Entebbe versus the failed attempt by the US "athletes" to rescue the Iranian hostages. I'll take the Jewish book-learners every day and twice on Sunday, thank you very much!!!!

[Please]

MBTN

You are too sensitive. There was nothing wrong with his statement "There aren't many great Jewish centerfielders. That's because they are spending their time in book-learning, which generally does indeed pay off better". It was not a hateful statement nor very obviously did it deny the possibility that Jewish people can be successful professional athletes.

In fact "The Jewish Phenomenon" shows that Jewish people are much more likely to pursue an education over a career as an athlete. So basically he was restating what history has shown to be true.

Furthermore, your response included stereotyping about both Jews and non Jews. You do know that not all Jewish people are alike and that some do not fit the profile outlined in the book being reviewed don't you? I also hope you were not trying to imply that church goers do not also read books, pursue educations and make great contributions in science, math and philosophy?